KATHMANDU, March 8: Nepal’s banking system is the most vulnerable sector to money laundering, said Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari.
Speaking at the AML Conference 2025 on Friday, the NRB Governor said that the Nepali banking system is highly sensitive. “Taking advantage of the situation, individuals involved in misconduct are using banks and financial institutions (BFIs) as a means to channel their illegally earned money.”
At a time when the country is struggling to get out of the grey list of the Financial Action Task Force (FATF), the central bank’s governor expressed his concerns over the functioning of the BFIs. “Bankers need to be more cautious on their end to check money laundering,” Adhikari added.
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Two weeks ago, the second FATF Plenary under the Presidency of Elisa de Anda Madrazo of Mexico decided to keep Nepal, along with 24 other countries, on its grey list. The FATF pointed out the country’s major weakness—its apathy toward the risks of illegally earned money—as the reason for adding Nepal to the grey list.
Increasing government surveillance based on risk intensity regarding transactions in cooperatives, casinos, mines, and mineral resources is among the concerns raised by the FATF. The intergovernmental body, which combats money laundering and terrorist financing, has given Nepal a two-year period to address its weaknesses and exit the grey list. “Citing the shortcomings of Nepal’s financial system, the FATF has provided a longer time frame for improvement,” said Adhikari, stressing the need to enforce effective measures to curb ongoing corruption.
Phanindra Gautam, Secretary at the Office of the Prime Minister and Council of Ministers, pointed out four key areas—casinos, precious metals, the haphazard opening of business firms, and real estate transactions—as factors that led to Nepal’s inclusion on the FATF’s grey list. “If the issue is not addressed on time, it will invite more problems for the country,” said Gautam.
Giving an example of the Philippines, a country that recently exited the grey list, Gautam emphasized the need to increase monitoring and supervision of illegal transactions taking place inside Nepal’s casinos.
